Computerized Systems in the Accounting Cycle
Jeanie A. Farris
Monroe College
Principles of Accounting I
Professor M. Mensah
Abstract
What is the accounting cycle? The accounting cycle is the name given to the collective process of recording and processing the accounting events of a company. The series of steps begin when a transaction occurs and end with its inclusion in the financial statements. The introduction of computerized accounting systems, provide major advantages such as speed and accuracy of operation, and, perhaps most importantly, the ability to see the real-time state of the company’s financial position. In my paper, I have listed and explained all the steps in the accounting cycle and have also stated through research, how computerized accounting can with the accounting process as a whole.
The first step in the accounting cycle is to collect and analyze data from transactions and events. As transactions and events related to financial resources occur, they are analyzed with respect to their effect on the financial position of the company. Every organization establishes a chart It is better in comparison to manual double entry systems where two or three entries are required. When a business transaction is inputted on the computer it is recorded in many different accounting records at the same time. This factors in all the other reasons why it is an advantage to use these computerized systems in the accounting cycle. They include speed, accuracy, up to date information, and efficiency. The systems do everything quicker through built in databases, and this is where the speed comes from. Making an error is nearly impossible since only one entry is used, and this creates accuracy. Up-to-date information because the accounting records are automatically updated and so account balances will always be
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